October 26, 2022

10 min read

In Defense of the Medicare Annual Wellness Visit

Medicare's annual wellness visit (AWV) has had a rocky ride since its introduction in 2010 and started in 2011 as part of the Affordable Care Act. As with many big healthcare changes, the new service was met with resistance and steeped in confusion, leading to terribly slow uptake and obstacles that still unjustly plague the service more than a decade later. When Medicare beneficiaries do not receive their AWV, this is not only a disservice to these patients, but practices and the healthcare system as a whole lose out on important and impactful benefits. 

Often confused by patients and providers with an annual physical, the annual wellness visit and its initial counterpart, the initial preventive physical exam (IPPE), the latter of which is also referred to as the "Welcome to Medicare" exam, differ in focus. While a physical exam (which is not covered by Medicare) hones in on the patient's current health status or ailments through a physical exam of the body, the IPPE and AWV capitalize on a discussion about the Medicare patient's health history, their risk factors for developing chronic diseases, and their current lifestyle.  

Once all these pieces of information have been collected, the patient and provider can put the puzzle together to create a cohesive picture of a patient's current health status, identify challenges likely on the horizon, and act on any necessary preventive measures the patient may need, help facilitate advanced care planning, and better steer future health and wellness outcomes. The annual wellness visit generously compensates Medicare providers for the time it takes to learn about their patient's health and develop and then maintain an individualized wellness and prevention plan year over year.  

While Medicare annual wellness visits offer tremendous value for providers and patients, the service still holds a negative stigma that unfairly affects its overall uptake and participation. Resistance occurs on both the patient and provider halves of the care spectrum. The understanding of what the annual wellness visit is — and is not — can leave patients confused and providers frustrated, leading to many missed preventive care management opportunities. We hope this column helps clear up some of the confusion concerning the Medicare AWV and motivates more providers to consider delivering this service to their patients. 

Medicare Annual Wellness Visit: Benefits for Providers 

The Medicare annual wellness visit is a beneficial resource for providers in a plethora of ways. In addition to the health benefits touched on earlier, probably the most enticing benefit in today's challenging economic environment is that the AWV can increase practice revenue significantly. A previously conducted study published by Health Affairs confirmed that practices that adopted the provision of AWVs experienced revenue growth. Medicare will pay, on average, around $170 for the IPPE (HCPCS G0402) or initial AWV (HCPCS G0438) and about $133 for subsequent AWVs (HCPCS G0439).  

When including the advance care planning service (CPT 99497/99498), providers can expect an average reimbursement of more than $215. A practice providing the AWV and ACP to just 50 Medicare beneficiaries would generate nearly $11,000 in reimbursement. Note: Learn more about growing an AWV program and its revenue in this webinar. 

The annual wellness can also help boost revenue because the service allows for provider-compensated time to go toward identifying chronic diseases and pinpointing those care management services, such as chronic care management (CCM) and remote patient monitoring (RPM), for which the patient would be eligible and benefit from. Patient enrollment and participation in CCM and/or RPM will save patients money and increase their chances of better health outcomes while further boosting a practice's revenue. Both CCM and RPM can bring in significant Medicare reimbursement, with the former recently becoming one of the most lucrative Medicare programs. 

The AWV can also help providers more effectively recognize and address care gaps, which can bring about other revenue opportunities. According to the American Academy of Family Physicians (AAFP), the Medicare AWV brings about the opportunity to collect the necessary information needed to participate in alternative payment models and quality programs.  

An AAFP article notes, "Providing Medicare wellness visits also offers a structure that helps physicians to close many pay-for-performance quality measure gaps, including those recognized by the Core Quality Measures Collaborative, the Integrated Healthcare Association's California Value-Based P4P program, and the National Committee for Quality Assurance's Healthcare Effectiveness Data and Information Set (HEDIS)." Since the AWV captures the information that participation in these programs requires (e.g., adult BMI assessment; advanced care planning; aspirin use; breast, cervical, and colorectal cancer screenings; depressions screening), it provides the perfect opportunity for practices to pursue participation in and reap the rewards of the growing number of value-based programs.

Medicare Annual Wellness Visits: Benefits to Patients  

Let's take a closer look at how the Medicare annual wellness visit is beneficial for patients. Simply put, the AWV provides patients with a clearer picture of their health status from one year to the next, allowing them to be more in tune and proactive with their health and stay on top of negative health changes before they lead to bigger problems. The AWV also establishes a baseline, longitudinal data, and supports managing changes in the data. 

Yet, according to one study conducted prior to the COVID-19 pandemic, about 51% of practices did not provide annual wellness visits, while about 23% only provided AWVs to at least a quarter of eligible patients. As we wrote last year, COVID-19 caused a substantial decline in preventive services, which likely extended to the AWV. While some of this volume has undoubtedly recovered over the past two-plus years, it's safe to say that a significant number of Medicare beneficiaries are still not receiving their routine AWV. 

Another benefit of the annual wellness visit is that it helps patients become better connected to relevant community resources and build a stronger, more cohesive working relationship with their care team. Participating in an AWV provides the patient with dedicated time to share important health information, the opportunity to discuss their end-of-life wishes and concerns, education to help them understand their individual risk factors, and an enhanced ability to identify and access resources, services, and specialists, as necessary. Thanks to these benefits, patients will be better supported and remain healthier and independent for longer.  

The icing on the cake is that the annual wellness visit is free to Medicare beneficiaries. When conducted with a provider that accepts Medicare assignments, the AWV does not require a copay nor is it subject to the patient's annual deductible. Research has also shown that patients who receive an AWV can reduce their annual care expenditure by more than $500.  

For this reason alone, the AWV is truly a win for patients. It costs them nothing up front, and they gain the overall health benefits and care connections resulting from a productive AWV with their provider. While additional preventive services provided in conjunction with the AWV may require patient payments, the health and financial value of these services easily offset any out-of-pocket costs.

Medicare Annual Wellness Visits: Role in Decreasing Impact and Cost of Chronic Diseases 

The impact of preventable chronic disease places a tremendous burden on the U.S. economy. In fact, of the more than $4 trillion spent annually on healthcare expenditures, 90% percent of that money is spent on care for people with chronic diseases and mental health conditions. Curbing the overall impact of chronic disease needs our full attention. Preventive care programs and services, such as the Medicare annual wellness visit, can help redirect our attention to prevention and improved symptom management, which will help reduce overall healthcare costs going forward.  

 If the financial cost of fighting chronic diseases isn't proof enough of their devastating effects, the five leading causes of death kill nearly 900,000 people prematurely every year. However, we now know that better access to preventive healthcare services could prevent as many as 40% of those deaths. With better uptake, the Medicare annual wellness visit will be an even more valuable tool in the fight against chronic disease. It is cost-effective, brings awareness to individual chronic disease risk factors, and directs focus on preventing chronic disease onset and better managing existing symptoms.  

Furthermore, as noted earlier, participation in prevention programs like the annual wellness visit gives providers the opportunity to identify patients who would benefit from care management services like chronic care management and remote patient monitoring. Such care management programs are proving their value in reducing the costs associated with chronic disease exacerbations. Preventive care, like the annual wellness visit, plays an integral role in identifying those with developing chronic diseases, lending well to successful continuity of care for these patients and helping to ensure they are handed off into effective care management programs for better, more cost-effective symptom control and health outcomes. 

Medicare Annual Wellness Visits: Good for All 

While confusion concerning the differences between the annual physical and annual wellness visit is creating challenges around uptake, this is a barrier that can — and should — be overcome. The AWV has proven itself to be a valuable and worthwhile service for patients and providers — one with benefits that far outweigh the time required to set up an AWV program and educate Medicare beneficiaries on the service and its importance.  

To summarize, the annual wellness visit saves Medicare beneficiaries money while providing them with the care and support needed to address current and future health concerns. For providers, the AWV delivers compensation for preventive care most are already delivering, packaged in one convenient yearly visit. Additional, worthwhile preventive services provided in conjunction with the AWV can rapidly increase the already strong reimbursement while giving patients more valuable, personalized care. The AWV provides an easier, more structured means of capturing the patient data needed for participation in pay-for-performance models and quality measures, all while boosting the bottom line.  

The Medicare annual wellness visit is a win-win for everyone involved. Patients, practitioners, and the U.S. healthcare system benefit from the cost-effectiveness of quality preventive care models. The AWV checks all the right boxes, exemplifying what an effective preventive care service should look like and achieve.


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